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EXHIBIT 4.1
[FLEET CAPITAL CORPORATION LOGO]
MASTER EQUIPMENT LEASE AGREEMENT NO.35352
LESSOR:
LESSEE:
FLEET CAPITAL CORPORATION,
NEW JERSEY NATURAL GAS COMPANY
a Rhode Island corporation
a NEW JERSEY CORPORATION
ADDRESS:
ADDRESS:
One Financial Plaza
1415 Wycoff Road
Providence, Rhode Island 02903
Wall, NJ 07719
1. LEASE OF EQUIPMENT
Subject to
the terms and conditions set forth herein (the "MASTER LEASE")
and in any Lease Schedule incorporating the terms of this Master
Lease (each, a
"LEASE SCHEDULE"), Lessor agrees to lease to Lessee, and Lessee
agrees to lease
from Lessor, the items and units of personal property described in
each such
Lease Schedule, together with all replacements, parts, additions,
accessories
and substitutions therefor (collectively, the "EQUIPMENT"). As used
in this
Lease, the term "ITEM OF EQUIPMENT" shall mean each functionally
integrated and
separately marketable group or unit of Equipment subject to this
Lease. Each
Lease Schedule shall constitute a separate, distinct and
independent lease of
Equipment and contractual obligation of Lessee. References to "THE
LEASE," "THIS
LEASE" or "ANY LEASE" shall mean and refer to any Lease Schedule
which
incorporates the terms of this Master Lease, together with all
exhibits,
addenda, schedules, certificates, riders and other documents and
instruments
executed and delivered in connection with such Lease Schedule or
this Master
Lease, all as the same may be amended or modified from time to
time. The
Equipment is to be delivered and installed at the locations
specified or
referred to in the applicable Lease Schedule. The Equipment shall
be deemed to
have been accepted by Lessee for all purposes under this Lease upon
Lessor's
receipt of an Acceptance Certificate with respect to such
Equipment, executed by
Lessee after receipt of all other documentation required by Lessor
with respect
to such Equipment. Lessor shall not be liable or responsible for
any failure or
delay in the delivery of the Equipment to Lessee for whatever
reason. As used in
this Lease, "ACQUISITION COST" shall mean (a) with respect to all
Equipment
subject to a Lease Schedule, the amount set forth as the
Acquisition Cost in the
Lease Schedule and the Acceptance Certificate applicable to such
Equipment; and
(b) with respect to any item of Equipment, the total amount of all
vendor or
seller invoices (including Lessee invoices, if any) for such item
of Equipment,
together with all acquisition fees and costs of delivery,
installation, testing
and related services, accessories, supplies or attachments procured
or financed
by Lessor from vendors or suppliers thereof (including items
provided by Lessee)
relating or allocable to such item of Equipment ("RELATED
EXPENSES"). As used in
this Lease with respect to any Equipment, the terms "ACCEPTANCE
DATE," "RENTAL
PAYMENT(S)," "RENTAL PAYMENT DATE(S)," "RENTAL PAYMENT NUMBERS,"
"RENTAL PAYMENT
COMMENCEMENT DATE," "LEASE TERM" and "LEASE TERM COMMENCEMENT DATE"
shall have
the meanings and values assigned to them in the Lease Schedule and
the
Acceptance Certificate applicable to such Equipment.
2. TERM AND RENT
The Lease
Term for any Equipment shall be as specified in the applicable
Lease Schedule. Rental Payments shall be in the amounts and shall
be due and
payable as set forth in the applicable Lease Schedule. Lessee
shall, if the
Acceptance Date and the Lease Term Commencement Date are not the
same day, pay
interim rent to Lessor on a pro-rata, per-diem basis from the
Acceptance Date to
the Lease Term Commencement Date set forth in the applicable
Acceptance
Certificate, payable on such Lease Term Commencement Date. If any
rent or other
amount payable hereunder shall not be paid within 10 days of the
date when due,
Lessee shall pay as an administrative and late charge an amount
equal to 1.5% of
the amount of any such overdue payment. All payments to be made to
Lessor shall
be made to Lessor in immediately available funds at the address
shown above, or
at such other place as Lessor shall specify in
master equipment lease agreement
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writing.
3. POSSESSION; PERSONAL PROPERTY
No right,
title or interest in the Equipment shall pass to Lessee other
than the right to maintain possession and use of the Equipment for
the Lease
Term (provided no Event of Default has occurred) free from
interference by any
person claiming by, through, or under Lessor. The Equipment shall
always remain
personal property even though the Equipment may hereafter become
attached or
affixed to real property. Lessee agrees to give and record such
notices and to
take such other action at its own expense as may be reasonably
necessary to
prevent any third party (other than an assignee of Lessor) from
acquiring or
having the right under any circumstances to acquire any interest in
the
Equipment or this Lease.
4. DISCLAIMER OF WARRANTIES
LESSOR IS
NOT THE MANUFACTURER OR SUPPLIER OF THE EQUIPMENT, NOR THE
AGENT
THEREOF, AND MAKES NO EXPRESS OR IMPLIED REPRESENTATIONS OR
WARRANTIES AS TO ANY
MATTER CONCERNING THE EQUIPMENT OR ITS USE AND OPERATION BY LESSEE
HEREUNDER,
INCLUDING WITHOUT LIMITATION, THE MERCHANTABILITY OF THE EQUIPMENT,
ITS FITNESS
FOR A PARTICULAR PURPOSE, ITS DESIGN OR CONDITION, ITS CAPACITY OR
DURABILITY,
THE QUALITY OF THE MATERIAL OR WORKMANSHIP IN THE MANUFACTURE OR
ASSEMBLY OF THE
EQUIPMENT, OR THE CONFORMITY OF THE EQUIPMENT TO THE PROVISIONS
AND
SPECIFICATIONS OF ANY PURCHASE ORDER RELATING THERETO, OR PATENT
INFRINGEMENTS,
AND LESSOR HEREBY DISCLAIMS ANY SUCH WARRANTY. LESSOR IS NOT
RESPONSIBLE FOR ANY
REPAIRS OR SERVICE TO THE EQUIPMENT, DEFECTS THEREIN OR FAILURES IN
THE
OPERATION THEREOF. Lessee has selected each item of Equipment and
the
manufacturer and/or supplier thereof based on its own judgment and
expressly
disclaims any reliance upon any statements or representations made
by Lessor.
During the Lease Term, Lessee shall be the beneficiary of and shall
be entitled,
on a non-exclusive basis, to any applicable manufacturer's or
vendor's
warranties with respect to the Equipment, to the extent permitted
by such
manufacturer's or vendor's warranties and applicable law. Lessor
hereby assigns
such warranties to Lessee, to the extent permitted thereby, and
agrees to
cooperate with Lessee, at Lessee's sole cost and expense, in making
any
reasonable claim against such manufacturer or vendor of Equipment
arising from
any defect in the Equipment.
If the
Equipment is not delivered, is not properly installed, does not
operate as warranted, becomes obsolete, or is unsatisfactory for
any reason
whatsoever, Lessee shall make all claims on account thereof solely
against the
manufacturer or supplier and not against Lessor, and Lessee shall
nevertheless
pay all rentals and other sums payable hereunder. Lessee
acknowledges that
neither the manufacturer or supplier of the Equipment, nor any
sales
representative or agent thereof, is an agent of Lessor, and no
agreement or
representation as to the Equipment or any other matter by any such
sales
representative or agent of the manufacturer or supplier shall in
any way affect
Lessee's obligations hereunder.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS
Lessee
represents and warrants to and covenants with Lessor that:
(a) Lessee
has the form of business organization indicated above and is
duly organized and existing in good standing under the laws of the
state listed
in the caption of this Master Lease and is duly qualified to do
business and is
in good standing in each jurisdiction where the failure to be in
good standing
would have a material adverse effect on the business, operations,
assets or
financial condition of Lessee; (b) this Lease has been duly
authorized by all
necessary action on the part of Lessee consistent with its form of
organization,
does not require any further shareholder or partner approval, does
not require
the approval of, or the giving notice to, any federal, state, local
or foreign
governmental authority which has not been previously obtained
(including the
approval of the New Jersey Board of Public Utilities) or given, and
does not
contravene any law binding on Lessee or contravene any certificate
or articles
of incorporation or by-laws or partnership certificate or
agreement, or any
agreement, indenture, or other instrument to which Lessee is a
party or by which
it may be bound; (c) this Lease has been duly executed and
delivered by
authorized officers or partners of Lessee and constitutes a legal,
valid and
binding obligation of Lessee enforceable in
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accordance with its terms; (d) Lessee has not and will not,
directly or
indirectly, create, incur or permit to exist any lien, encumbrance,
mortgage,
pledge, attachment or security interest on or with respect to the
Equipment or
this Lease (except those of persons claiming by, through or under
Lessor); (e)
the Equipment will be used solely in the conduct of Lessee's
business and will
remain in the location shown on the applicable Lease Schedule
provided, however,
that the Equipment may be relocated to any of Lessee's business
locations within
the continental United States, and Lessee shall provide prompt (not
more than 30
days) written notice thereof to Lessor and shall complete all
notifications,
filings, recordings and other actions in such new location as
Lessor may
reasonably request to protect and perfect Lessor's interest in the
Equipment;
(f) all information concerning the Equipment provided by Lessee to
Lessor or its
agents or appraisers was accurate and complete when given and as of
the
Acceptance Date; (g) there are no pending or, to the best of
Lessee's knowledge,
threatened actions or proceedings before any court or
administrative agency
which could materially adversely affect Lessee's financial
condition or
operations; (h) all credit, financial and other information
provided to Lessor
or its agents by Lessee or at Lessee's direction is, and all such
information
hereafter so provided furnished will be, true, correct and complete
in all
material respects; and (i) Lessor has not selected, manufactured or
supplied the
Equipment to Lessee and has acquired any Equipment subject hereto
solely in
connection with this Lease and Lessee has received and approved the
terms of any
purchase order or agreement with respect to the Equipment.
6. INDEMNITY
Lessee
assumes the risk of liability for, and hereby agrees to
indemnify
and hold safe and harmless, and covenants to defend, Lessor, its
employees,
servants and agents from and against the following ("CLAIMS"): (a)
any and all
liabilities, losses, damages, claims and expenses (including
reasonable legal
expenses of every kind and nature) arising out of the manufacture,
purchase,
shipment and delivery of the Equipment to Lessee in connection with
the Lease,
acceptance or rejection, ownership, titling, registration, leasing,
possession,
operation, use, return or other disposition of the Equipment in
connection with
the Lease, including, without limitation, any liabilities that may
arise from
patent or latent defects in the Equipment (whether or not
discoverable by
Lessee), any claims based on absolute tort liability or warranty in
respect of
the Equipment, and any claims based on patent, trademark or
copyright
infringement in respect of the Equipment; (b) any and all loss or
damage of or
to the Equipment; and (c) any obligation or liability to the
manufacturer or any
supplier of the Equipment arising under any purchase orders issued
by or
assigned to Lessor. If any Claim is made against Lessor or Lessee,
the party
receiving notice of such Claim shall use its best efforts to
promptly notify the
other. The foregoing indemnities and covenants set forth in this
Section 6 shall
continue in full force and effect and shall survive the expiration
or earlier
termination of the Lease.
7. TAXES AND OTHER CHARGES
Lessee
agrees to comply with all laws, regulations and governmental
orders
related to this Lease and to the Equipment and its use or
possession, and to pay
when due, and to defend and indemnify Lessor against liability for
all license
fees, assessments, and sales, use, property, excise, privilege and
other taxes
(including any related interest or penalties) or other charges or
fees now or
hereafter imposed by any governmental body or agency upon any
Equipment, or with
respect to the manufacturing, ordering, shipment, purchase,
ownership, delivery,
installation, leasing, operation, possession, use, return, or other
disposition
thereof or the rentals hereunder (other than taxes on or measured
solely by the
net income of Lessor). Any fees, taxes or other lawful charges paid
by Lessor
upon failure of Lessee to make such payments shall at Lessor's
option become
immediately due from Lessee to Lessor.
If any
Lease Schedule is denominated as a "TRUE LEASE SCHEDULE," then,
with respect to the Equipment set forth on such True Lease
Schedule, Lessee and
Lessor anticipate that Lessor shall be entitled to the following
tax benefits
(the "TAX BENEFITS"): Lessor will be entitled to cost recovery
deductions under
Section 168 of the Internal Revenue Code of 1986, as amended (the
"CODE"), using
a 200% declining balance method of depreciation switching to the
straight line
method for the first taxable year for which such method will yield
larger
depreciation deductions, and assuming a half-year convention and
zero salvage
value for the applicable recovery period for such Equipment as set
forth in the
True Lease Schedule with respect to such Equipment. With respect to
Equipment
set forth on any such True Lease Schedule, Lessee agrees that:
Lessee will not
claim that Lessee is the owner of the Equipment subject thereto or
that Lessee
is
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otherwise entitled to all or any of the Tax Benefits; Lessee will
not take any
action inconsistent with Lessor's anticipated Tax Benefits; and the
Equipment
will not constitute "public utility property" or "tax-exempt use
property"
within the meaning of Sections 168(i)(10) or 168(h) of the Code.
If, as the
result of any act, omission and/or misrepresentation of Lessee,
there shall be a
loss, disallowance, recapture or delay in claiming all or any
portion of the Tax
Benefits with respect to the Equipment, or there shall be included
in Lessor's
gross income for Federal, state or local income tax purposes any
amount on
account of any addition, modification or improvement to or in
respect of any of
the Equipment made or paid for by Lessee (any loss, disallowance,
recapture,
delay or inclusion being herein called a "TAX LOSS"), Lessee shall
reimburse
Lessor for such Tax Loss in the manner provided for in this Section
7. Lessee
shall not have any liability to Lessor for indemnification
hereunder for any Tax
Loss with respect to a Lease resulting from one or more of the
following: (i)
any voluntary transfer or other disposition by Lessor of any of its
interests in
the Lease or the Equipment; (ii) Lessor's failure to claim or
follow the proper
procedure in claiming any Tax Benefit in a proper and timely
manner; and (iii)
Lessor's failure to have sufficient income to utilize any Tax
Benefit.
A Tax Loss shall be deemed to have occurred if either (a) a
deficiency shall
have been proposed or a claim has been made that a Tax Loss has so
occurred by
the Internal Revenue Service or other taxing authority having
jurisdiction, or
(b) independent tax counsel ("TAX COUNSEL") selected by Lessor and
acceptable to
Lessee (which acceptance shall not be unreasonably withheld or
delayed by
Lessee) has rendered an opinion to Lessor that such Tax Loss has so
occurred.
Lessor shall use its best efforts to promptly provide written
notice to Lessee
that a Tax Loss has occurred. Provided that no Event of Default has
occurred and
is continuing, upon Lessee's written request (received not more
than 30 days
following Lessor's written notice to Lessee of the occurrence of
such Tax Loss)
and concurrent written agreement to pay Lessor for any liability
associated with
such Tax Loss in accordance with the provisions hereof and to pay
for all costs
and expenses as and when the same shall become due related to the
contest of all
or any portion of any such Tax Loss (a "CONTESTED MATTER"), and if
in the
opinion of Tax Counsel a reasonable basis for the contest of such
Contested
Matter exists that is more likely than not to succeed, then Lessor
shall pursue
the contest of such Contested Matter in such forum as Lessor shall
select,
considering in good faith such request as Lessee may make
concerning the most
appropriate forum in which to proceed. Lessor shall not be
obligated to take any
such legal or other appropriate action with respect to a Contested
Matter if
Lessor notifies Lessee in writing at any time that Lessor waives
its right to
any indemnity payment from Lessee hereunder with respect to such
Contested
Matter. The action to be taken may, in Lessor's sole discretion
reasonably
exercised, be commenced prior to making payment of any tax,
interest and/or
penalty attributable to such Contested Matter (a "TAX PAYMENT") or
after making
such Tax Payment and then seeking a refund. If Lessor takes such
action prior to
making such Tax Payment, the indemnity amounts payable under this
Section 7 with
respect to the Contested Matter need not be paid by Lessee while
such action is
pending, provided that Lessee shall pay the costs and expenses
relating to such
action as and when the same shall become due. In such case, if the
Final
Determination (hereinafter defined) of a Contested Matter shall be
adverse to
Lessor, the indemnity amounts payable under this Section 7 with
respect to a
Contested Matter shall be computed by Lessor as of the date of such
Final
Determination, Lessor shall notify Lessee in writing of such
computation, and
Lessee shall make the indemnity payments required in accordance
with this
Section 7. If Lessor determines to make such Tax Payment prior to
pursuing a
Contested Matter and to then seek a refund, Lessee will advance to
Lessor, as an
interest-free loan or loans, and without any additional
net-after-tax cost to
Lessor, amounts equal to the amount of such Tax Payment
attributable to such
Contested Matter. If Lessor seeks a refund after making such Tax
Payment, and if
the Final Determination shall be in favor of Lessor, (i) no further
payments
shall be due hereunder in respect of such Contested Matter (or an
appropriate
reduction shall be made if the Final Determination is partly in
favor of and
partly adverse to Lessor) other than any outstanding costs or
expenses incurred
by Lessor with respect to such Contested Matter, and (ii) Lessor
shall pay to
the Lessee an amount equal to the amounts theretofore paid by
Lessee to Lessor
in respect of such Tax Payment (or a proportionate part thereof if
the Final
Determination is partly in favor of and partly adverse to Lessor)
on or before
the next succeeding Rent Payment Date (or within thirty (30) days
from such
Final Determination, if there is no succeeding Rent Payment Date),
together with
the amount of any penalty or interest actually refunded to Lessor
as a result of
such Final Determination. If the Final
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Determination of such Contested Matter shall be adverse to Lessor,
the
indemnity amounts payable under this Section 7 with respect to the
Contested
Matter shall be computed by Lessor as of the date of such Final
Determination,
Lessor shall notify Lessee in writing of such computation and,
Lessee shall make
the indemnity payments required in accordance with this Section 7.
A "FINAL
DETERMINATION," for the purposes of this Section 7 means (i) the
occurrence of a
Tax Loss which is not contested or ceases to be contested at the
request of
Lessee in accordance with the provisions of this Section 7, (ii) a
final
decision of a court of competent jurisdiction after all allowable
appeals have
been exhausted by either party to the action, or (iii) a
determination within
the meaning of Section 1313(a) of the Code.
Subject to the foregoing provisions relating to prepayment of Tax
Payments, upon
a Final Determination of a Tax Loss, Lessee shall reimburse Lessor
for such Tax
Loss by payment of equal periodic payments over the then remaining
Lease Term
with respect to the Equipment related to such Tax Loss with each
Rental Payment
due and payable with respect to such Equipment, after deduction of
all taxes
required to be paid by Lessor with respect to the receipt of such
periodic
payments, in an amount sufficient to provide Lessor with the
amounts necessary
to maintain Lessor's after-tax economic yield and overall net
after-tax cash
flows for the entire Lease Term at least at the same level that
would have been
available if such Tax Loss had not occurred, plus any interest,
penalties or
additions to tax that may be imposed in connection with such Tax
Loss.
The foregoing indemnities and covenants set forth in this Section 7
shall
continue in full force and effect and shall survive the expiration
or earlier
termination of the Lease.
8. DEFAULT
Lessee
shall be in default of this Lease upon the occurrence of any one
or
more of the following events (each an "EVENT OF DEFAULT"):
(a) Lessee
shall fail to make any payment, of rent or otherwise, under any
Lease within 10 days after written notice thereof to Lessee; or (b)
Lessee shall
fail to obtain or maintain any of the insurance required under any
Lease; or (c)
Lessee shall fail to perform or observe any covenant, condition or
agreement
under any Lease (other than those referred to in clauses (a) and
(b) of this
section 8), and such failure continues for 30 days after written
notice thereof
to Lessee; or (d) Lessee shall default in the payment or
performance of any
indebtedness or obligation to Lessor or any affiliated person, firm
or entity
controlling, controlled by or under common control with Lessor
("LESSOR
AFFILIATE"), under any loan, note, security agreement, lease,
guaranty, title
retention or conditional sales agreement or any other instrument or
agreement
evidencing such indebtedness with Lessor or a Lessor Affiliate; or
(e) any
representation or warranty made by Lessee herein or in any
certificate,
agreement, statement or document hereto or hereafter furnished to
Lessor in
connection herewith, including without limitation, any financial
information
disclosed to Lessor, shall prove to be false or incorrect in any
material
respect; or (f) the commencement of any bankruptcy, insolvency,
arrangement,
reorganization, receivership, liquidation or other similar
proceeding by Lessee
or any of its properties or businesses, or the commencement of any
such
proceeding against Lessee which is not discharged or vacated within
60 days
thereof, or the appointment of a trustee, receiver, liquidator or
custodian for
Lessee or any of its properties or businesses, or if Lessee suffers
the entry of
an order for relief under Title 11 of the United States Code; or
the making by
Lessee of a general assignment or deed of trust for the benefit of
creditors, or
(g) Lessee shall default in any payment or performance in respect
of any
obligations for borrowed money or other financial accommodation
having an
aggregate principal balance or other liability which, upon
acceleration in
accordance thereof, shall be in excess of $5,000,000 owing to any
parties other
than a Lessor Affiliate, and any applicable grace or cure period
with respect
thereto has expired; or (h) Lessee shall terminate its existence by
merger,
consolidation, sale of substantially all of its assets or otherwise; or (i) if
Lessee is a privately held entity, and more than 50% of Lessee's
voting capital
stock or other equivalent ownership interest, or effective control
of such stock
or interest in Lessee, issued and outstanding from time to time, is
not retained
by the holders of such stock or interest on the date of this Lease;
or (j) if
Lessee is a publicly held corporation, there shall be a change in
the ownership
of Lessee's stock such that Lessee is no longer subject to the
reporting
requirements of the Securities Exchange Act of 1934, or no longer
has a class of
equity securities registered under Section 12 of the Securities Act
of 1933.
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9. REMEDIES.
Upon the
occurrence of any Event of Default, Lessee shall pay overdue
interest on any payment or other amounts past due under the Lease
(by reason of
acceleration or otherwise), accruing from the due date thereof
until paid in
full at the rate of 1 1/2% per month or the maximum amount
permitted by
applicable law, whichever is tower. Upon the occurrence of any
Event of Default,
Lessor may, at its sole option and in its reasonable discretion,
exercise one or
more of the following remedies with respect to any or all of the
Equipment:(a)
cause Lessee to promptly return, at Lessee's expense, any or all
Equipment to
such location as Lessor may designate in accordance with the terms
of Section 18
of this Master Lease, or Lessor, at its option, may enter upon the
premises
where the Equipment is located and take immediate possession of and
remove the
same by summary proceedings or otherwise, all without liability to
Lessor for or
by reason of damage to property or such entry or taking possession
except for
Lessor's gross negligence or willful misconduct; (b) sell any or
all Equipment
at public or private sale or otherwise dispose of, hold, use,
operate, lease to
others or keep idle the Equipment, all as Lessor in its reasonable
discretion
may determine and all free and clear of any rights of Lessee; (c)
remedy such
default, including making repairs or modifications to the
Equipment, for the
account and expense of Lessee, and Lessee agrees to reimburse
Lessor for all of
Lessor's reasonable costs and expenses; (d) by written notice to
Lessee,
terminate the Lease with respect to any or all Lease Schedules and
the Equipment
subject thereto, as such notice shall specify, and, with respect to
such
terminated Lease Schedules and Equipment, declare immediately due
and payable
and recover from Lessee, as liquidated damages for loss of Lessor's
bargain and
not as a penalty, an amount equal to the "STIPULATED LOSS VALUE"
set forth in
the Schedule of Stipulated Loss Values attached to and made a part
of the
applicable Lease Schedule, calculated as of the next following
Rental Payment
Date; (e) apply any sale or remarketing proceeds of the Equipment
at any time to
reduce any Stipulated Loss Value due to Lessor, and (f) exercise
any other right
or remedy which may be available to Lessor under applicable law, or
proceed by
appropriate court action to enforce the terms hereof or to recover
damages for
the breach hereof, including reasonable attorneys' fees and court
costs. Except
as otherwise specifically provided in this Master Lease requiring
Lessor to
provide notice of any act or event to Lessee, notice of Lessor's
intention to
accelerate, notice of acceleration, notice of nonpayment,
presentment, protest,
notice of dishonor, or any other notice whatsoever are hereby
waived by Lessee
and any endorser, guarantor, surety or other party liable in any
capacity for
any of the Lessee's obligations under or in respect of the Lease.
No remedy
referred to in this Section 9 shall be exclusive, but each shall be
cumulative
and in addition to any other remedy referred to above or otherwise
available to
Lessor at law or in equity.
The
exercise or pursuit by Lessor of any one or more of such
remedies
shall not preclude the simultaneous or later exercise or pursuit by
Lessor of
any or all such other remedies, and all remedies hereunder shall
survive
termination of this Lease. At any sale of the Equipment pursuant to
this Section
9, Lessor may bid for the Equipment. Notice required, if any, of
any sale or
other disposition hereunder by Lessor shall be satisfied by
Lessee's receipt of
such notice at least seven (7) days prior to such sale or other
disposition. In
the event Lessor takes possession and disposes of the Equipment,
the proceeds of
any such disposition shall be applied in the following order: (1)
to all of
Lessor's reasonable costs, charges and expenses incurred in taking,
removing,
holding, repairing and selling or leasing the Equipment; (2) to the
extent not
previously paid by Lessee, to pay Lessor for any Stipulated Loss
Value then
remaining unpaid hereunder; (3) to reimburse Lessee for any
Stipulated Loss
Value previously paid by Lessee as liquidated damages hereunder;
and (4) the
balance, if any, shall be retained by Lessor. A termination of a
Lease shall
occur only upon written notice by Lessor and only with respect to
such Equipment
as Lessor shall specify in such notice. Termination under this
Section 9 shall
not affect Lessee's duty to perform Lessee's obligations hereunder
to Lessor in
full. Lessee agrees to reimburse Lessor on demand for any and all
reasonable
costs and expenses incurred by Lessor in enforcing its rights and
remedies
hereunder following the occurrence of an Event of Default,
including, without
limitation, reasonable attorney's fees, and the costs of
repossession, storage,
insuring, reletting, selling and disposing of any and all
Equipment.
10. ADDITIONAL SECURITY
It is the
intention of the parties that all Leases shall be transactions
which create a lease and not a security interest as defined and
described in
Section 1-201(37) of the Uniform Commercial Code. In the
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event that any Lease is deemed to create a security interest in any
Equipment,
and for so long as any obligations of Lessee shall remain
outstanding under any
Lease, Lessee hereby grants to Lessor a security interest in all of
Lessee's
rights in and to Equipment subject to such Lease from time to time,
to secure
the prompt payment and performance when due (by reason of
acceleration or
otherwise) of each and every indebtedness, obligation or liability
of Lessee, or
any affiliated person, firm, or entity controlling, controlled by,
or under
common control with Lessee, owing to Lessor, whether now existing
or hereafter
arising, including but not limited to all of such obligations under
or in
respect of any Lease. The extent to which Lessor shall have a
purchase money
security interest in any item of Equipment under a Lease that is
deemed to
create a security interest under Section 1-201(37) of the Uniform
Commercial
Code shall be determined by reference to the Acquisition Cost of
such item
financed by Lessor.
11. NOTICES
Any
notices or demands required or permitted to be given under this
Lease
shall be given in writing and by facsimile transmission or courier
service with
confirmation of receipt, or by certified mail, return receipt
requested, and
shall become effective upon such facsimile transmission, or such
delivery or
receipt by Lessee or Lessor, if to Lessor to the attention of
Customer Accounts,
or if to Lessee at the address set forth above, or to such other
address as the
party to receive notice hereafter designates by such written notice
to the
other.
12. USE; MAINTENANCE; INSPECTION; LOSS AND DAMAGE
During the
Lease Term for each item of Equipment, Lessee shall, unless
Lessor shall otherwise consent in writing: (a) permit each item of
Equipment to
be used only within the continental United States by qualified
personnel solely
for business purposes and the purpose for which it was designed and
shall, at
its sole expense, service, repair, overhaul and maintain each item
of Equipment
in the same condition as when received, ordinary wear and tear
excepted, in good
operating order, consistent with prudent industry practice (but, in
no event
less than the same extent to which Lessee maintains other similar
equipment in
the prudent management of its assets and properties) and in
compliance with all
applicable laws, ordinances, regulations, and conditions of any
insurance
policies maintained by Lessee under the Lease, and all manuals,
orders,
recommendations, instructions and other written requirements as to
the repair
and maintenance of such item of Equipment issued at any time by the
vendor
and/or manufacturer thereof; (b) furnish to Lessor such information
concerning
the condition, location, use and operation of the Equipment as
Lessor may
reasonably request; (c) permit any person designated by Lessor to
visit and
inspect any Equipment and any records maintained in connection
therewith during
normal business hours or otherwise at mutually agreeable times, and
without
unreasonable interruption of Lessee's business operations,
provided, however,
that the failure of Lessor to inspect the Equipment or to inform
Lessee of any
noncompliance shall not relieve Lessee of any of its obligations
hereunder, (d)
if any Equipment does not comply with the requirements of this
Lease, Lessee
shall, within 30 days of written notice from Lessor, faring such
Equipment into
compliance; (e) not use any Equipment, nor allow the same to be
used, for any
unlawful purpose, nor in connection with any property or material
that would
subject the Lessor to any liability under any state or federal
statute or
regulation pertaining to the production, transport, storage,
disposal or
discharge of hazardous or toxic waste or materials; and (f) make no
additions,
alterations, modifications or improvements (collectively,
"IMPROVEMENTS") to any
item of Equipment that are not readily removable without causing
material damage
to such item of Equipment or which will cause the value, utility or
useful life
of such item of Equipment to materially decline. If any such
Improvement is made
and cannot be removed without causing material damage or decline in
value,
utility or useful life (a "NON-SEVERABLE IMPROVEMENT"), then Lessee
warrants
that such Non-Severable Improvement shall immediately become
Lessor's property
upon being installed and shall be free and clear of all liens and
encumbrances
and shall become Equipment subject to all of the terms and
conditions of the
Lease. All such Improvements that are not Non-Severable
Improvements shall be
removed by Lessee prior to the return of the item of Equipment
hereunder or such
Improvements shall also become the sole and absolute property of
Lessor without
any further payment by Lessor to Lessee and shall be free and clear
of all liens
and encumbrances whatsoever. Lessee shall repair all damage to any
item of
Equipment caused by the removal of any Improvement so as to restore
such item of
Equipment to the same condition that existed prior to its
installation and as
required by this Lease.
master equipment lease agreement
7
<PAGE>
As between
Lessee and Lessor and its successors and assigns, and without
regard to any rights or remedies that Lessee may have against any
other parties,
Lessee hereby assumes all risk of loss, damage or destruction for
whatever
reason to the Equipment from and after the earlier of the date (i)
on which the
Equipment is ordered or (ii) Lessor pays the purchase price of the
Equipment,
and continuing until the Equipment has been returned to, and
accepted by, Lessor
in the condition required by Section 18 hereof upon the expiration
of the Lease
Term. If during the Lease Term all or any portion of an item of
Equipment shall
become lost, stolen, destroyed, damaged beyond repair or rendered
permanently
unfit for use for any reason, or in the event of any condemnation,
confiscation,
theft or seizure or requisition of title to or use of such item (an
"EVENT OF
LOSS"), Lessee shall, at Lessee's option: (a) promptly replace such
item of
Equipment with similar equipment reasonably acceptable to Lessor
having an
equivalent value, utility and remaining useful life of such item of
Equipment,
or (b) immediately pay to Lessor an amount equal to the Stipulated
Loss Value of
such item of Equipment, as of the Rental Payment Date next
following such Event
of Loss, and Lessor shall thereafter reduce the remaining Rental
Payments for
the remaining Equipment for the remainder of the Lease Term.
13. INSURANCE
Lessee
shall procure and maintain insurance in such amounts and upon
such
terms and with such companies as Lessor may reasonably approve,
during the
entire Lease Term and until the Equipment has been returned to, and
accepted by,
Lessor in the condition required by Section 18 hereof, at Lessee's
expense,
provided that in no event shall such insurance be less than the
following
coverages and amounts: (a) Comprehensive General Liability
Insurance including
product/completed operations and contractual liability coverage,
with minimum
limits of $5,000,000 each occurrence, and Combined Single Limit
Bodily Injury
and Property Damage, $5,000,000 aggregate, where applicable; and
(b) All Risk
Physical Damage Insurance, including earthquake and flood, on each
item of
Equipment, in an amount not less than the greater of the Stipulated
Loss Value
of the Equipment or (if available) its full replacement value.
Lessor will be
included as an additional insured and loss payee as its interest
may appear.
Such policies shall be endorsed to provide that the coverage
afforded to Lessor
shall not be rescinded, impaired or invalidated by any act or
neglect of Lessee.
Lessee agrees to waive Lessee's right and its insurance carrier's
rights of
subrogation against Lessor for any and all loss or damage.
All policies of insurance maintained by Lessee in accordance with
the terms
hereof shall be endorsed or contain a clause requiring the insurer
to furnish
Lessor with at least 30 days' prior written notice of any material
change,
cancellation or non-renewal of coverage. Upon execution of this
Lease, Lessee
shall furnish Lessor with a certificate of insurance or other
evidence
satisfactory to Lessor that such insurance coverage is in effect,
provided,
however, that Lessor shall be under no duty either to ascertain the
existence of
or to examine such insurance coverage or to advise Lessee in the
event such
insurance coverage should not comply with the requirements hereof.
In case of
failure of Lessee to procure or maintain insurance, Lessor may at
its option
obtain such insurance, the cost of which will be paid by the Lessee
as
additional rentals. Lessee further agrees to give Lessor prompt
notice of any
damage to or loss of, the Equipment, or any part thereof.
Notwithstanding anything contained herein to the contrary, and so
long as no
Event of Default has occurred and is continuing, Lessor and Lessee
agree that
Lessee shall have the right to self-insure the Equipment against
the risks
intended to be covered by the All Risk Physical Damage Insurance
policy required
pursuant to Section 13(cb) above ("PROPERTY INSURANCE"), provided,
however, that
upon the occurrence of an Event of Default hereunder, then Lessee
agrees, upon
receipt of notice from Lessor, to obtain Property Insurance
complying with the
terms of Section 13(cb) above.
14. LIMITATION OF LIABILITY
Lessor
shall have no liability in connection with or arising out of
the
ownership, leasing, furnishing, performance or use of the Equipment
or any
special, indirect, incidental or consequential damages of any
character,
including, without limitation, loss of use of production facilities
or
equipment, loss of profits, property damage or lost production,
whether suffered
by Lessee or any third party.
master equipment lease agreement
8
<PAGE>
15. FURTHER ASSURANCES
Lessee
shall promptly execute and deliver to Lessor such further
documents
and take such further action as Lessor may require in order to more
effectively
carry out the intent and purpose of this Lease. Lessee shall
provide to Lessor,
within 120 days after the close of each of Lessee's fiscal years,
and, upon
Lessor's request, within 45 days of the end of each quarter of
Lessee's fiscal
year, a copy of its financial statements prepared in accordance
with generally
accepted accounting principles and, in the case of annual financial
statements,
audited by independent certified public accountants, and in the
case of
quarterly financial statements certified by Lessee's treasurer or
chief
financial officer. Lessee shall execute and deliver to Lessor upon
Lessor's
request any and all schedules, forms and other reports and
information as Lessor
may reasonably deem necessary or appropriate to respond to
requirements or
regulations imposed by any governmental authorities. Lessee shall
execute and
deliver to Lessor upon Lessor's request such further and additional
documents,
instruments and assurances as Lessor reasonably deems necessary (a)
to
acknowledge and confirm, for the benefit of Lessor or any assignee
or transferee
of any of Lessor's rights, title and interests hereunder (an
"ASSIGNEE"), all of
the terms and conditions of all or any part of this Lease and
Lessor's or
Assignee's rights with respect thereto, and Lessee's compliance
with all of the
terms and provisions hereof, and (b) to preserve, protect and
perfect Lessor's
or Assignee's right, title or interest hereunder and in any
Equipment,
including, without limitation, such UCC financing statements or
amendments,
corporate resolutions, certificates of compliance, notices of
assignment or
transfers of interests, and restatements and reaffirmations of
Lessee's
obligations and its representations and warranties with respect
thereto as of
the dates requested by Lessor from time to time. In furtherance
thereof, Lessor
may file or record this Lease or a memorandum or a photocopy hereof
(which for
the purposes hereof shall be effective as a financing statement) so
as to give
notice to third parties, and, following the occurrence of an Event
of Default,
Lessee hereby appoints Lessor as its attorney-in-fact to execute,
sign, file and
record UCC financing statements and other lien recordation
documents with
respect to the Equipment where Lessee fails or refuses to do so
after Lessor's
written request, and Lessee agrees to pay or reimburse Lessor for
any filing,
recording or stamp fees or taxes arising from any such filings.
16. ASSIGNMENT
This Lease
and any rights of Lessor hereunder shall be assignable by
Lessor to an Assignee absolutely or as security, without notice to
Lessee,
subject to the rights of Lessee hereunder for the use and
possession of the
Equipment during the Lease Term for so long as no Event of Default
has occurred
and is continuing hereunder. Any such assignment shall not relieve
Lessor of its
obligations hereunder unless specifically assumed by the Assignee,
and LESSEE
AGREES IT SHALL NOT ASSERT ANY DEFENSE, RIGHTS OF SET-OFF OR
COUNTERCLAIM
AGAINST ANY ASSIGNEE TO WHICH LESSOR SHALL HAVE ASSIGNED ITS RIGHTS
AND
INTERESTS HEREUNDER, NOR HOLD OR ATTEMPT TO HOLD SUCH ASSIGNEE
LIABLE FOR ANY OF
LESSOR'S OBLIGATIONS HEREUNDER (LESSOR REMAINING LIABLE TO LESSEE
FOR ALL SUCH
OBLIGATIONS). LESSEE SHALL NOT ASSIGN OR DISPOSE OF ANY OF ITS
RIGHTS OR
OBLIGATIONS UNDER THIS LEASE OR ENTER INTO ANY SUBLEASE WITH
RESPECT TO ANY OF
THE EQUIPMENT WITHOUT THE EXPRESS PRIOR WRITTEN CONSENT OF
LESSOR.
17. LESSEE'S OBLIGATIONS ABSOLUTE AND UNCONDITIONAL
THIS IS A
NON-CANCELABLE, NON-TERMINABLE LEASE OF EQUIPMENT FOR THE
ENTIRE
LEASE TERM PROVIDED IN EACH LEASE, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED IN
THE LEASE. This Lease is a finance lease pursuant to sections
2A-103(g) and
2A-407 of the Uniform Commercial Code, and Lessee hereby agrees
that it shall
not be entitled to any abatement of rents or of any other amounts
payable
hereunder by Lessee, and that its obligation to pay all rent and
any other
amounts owing hereunder shall be absolute and unconditional under
all
circumstances, including, without limitation, the following
circumstances: (i)
any claim by Lessee to any right of set-off, counterclaim,
recoupment, defense
or other right which Lessee may have against Lessor, any seller or
manufacturer
of any Equipment or anyone else for any reason whatsoever, or (ii)
the existence
of any liens, encumbrances or rights of others whatsoever with
respect to any
Equipment, whether or not resulting from claims against Lessor not
related to .
the ownership of such Equipment.
18. RETURN OF EQUIPMENT
master equipment lease agreement
9
<PAGE>
Upon the
expiration or earlier termination of the Lease Term with
respect
to any Equipment, and provided that Lessee has not validly
exercised any
purchase option with respect thereto, Lessee shall: (a) return the
Equipment to
a location and in the manner designated by the Lessor within the
continental
United States, including, as reasonably required by Lessor,
securing
arrangements for the disassembly and packing for shipment by an
authorized
representative of the manufacturer of the Equipment, shipment with
all parts and
pieces on a carrier designated or approved by Lessor, and then
reassembly
(including, if necessary, repair and overhaul) by such
representative at the
return location in the condition the Equipment is required to be
maintained by
the Lease and in such condition as will make the Equipment
immediately able to
perform all functions for which the Equipment was originally
designed (or as
upgraded during the Lease Term), and immediately qualified for
the
manufacturer's (or other authorized servicing representative's)
then-available
service contract or warranty; (b) cause the Equipment to qualify
for all
applicable licenses or permits necessary for its operation for its
intended
purpose and to comply with all specifications and requirements of
applicable
federal, state and local laws, regulations and ordinances; (c) upon
Lessor's
request, provide suitable storage, acceptable to Lessor, for the
Equipment for a
period not to exceed 90 days from the date of return of all
Equipment subject to
the Lease thereof; (d) cooperate with Lessor in attempting to
remarket the
Equipment, including display and demonstration of the Equipment to
prospective
purchasers or lessees, and allowing Lessor to conduct a private
sale or auction
of the Equipment on Lessee's premises. All reasonable costs
incurred in
connection with any of the foregoing shall be the sole
responsibility of the
Lessee.
If Lessee
fails to return the Equipment to Lessor in accordance with the
terms hereof upon the expiration of the Lease Term, Lessor may
elect, in its
sole discretion, to continue the Lease Term on a month-to-month
basis (the
"CONTINUED TERM") on the same terms and conditions of the Lease,
provided that
(i) the monthly Rental Payments payable during the Continued Term
shall be equal
to the highest monthly Rental Payment payable during the Lease
Term, (ii) either
Lessee or Lessor may thereafter terminate the Continued Term of the
Lease upon
90 days prior written notice to the other and return of the
Equipment to Lessor
in accordance with all of the terms and provisions of the Lease,
and (iii) the
terms and options provided in any purchase, renewal, rental
adjustment or
conversion option Riders to the Lease shall not be available to
Lessee or
otherwise applicable during or at the expiration of the Continued
Term.
19. INTENTIONALLY OMITTED
20. MISCELLANEOUS; ENFORCEABILITY AND GOVERNING LAW
This Master Lease will not be binding on Lessor until accepted and
executed by
Lessor. Any waiver of the terms hereof shall be effective only in
the specific
instance and for the specific purpose given. Time is of the essence
in the
payment and performance of all of Lessee's obligations under the
Lease. The
captions in this Lease are for convenience only and shall not
define or limit
any of the terms hereof.
Any
provisions of this Lease that are unenforceable in any
jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such
unenforceability without invalidating the remaining provisions
hereof, and any
such unenforceability in any jurisdiction shall not render
unenforceable such
provisions in any other jurisdiction. To the extent permitted by
applicable law,
Lessee hereby waives; (a) any provisions of law which render any
provision
hereof unenforceable in any respect; (b) all rights and remedies
under Rhode
Island General Laws Sections 6A-2.1-508 through 522 or
corresponding provisions
of the Uniform Commercial Code article or division pertaining to
personal
property leasing in any jurisdiction in which enforcement of this
Lease is
sought.
THIS LEASE
AND THE LEGAL RELATIONS OF THE PARTIES HERETO SHALL IN ALL
RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE
OF RHODE ISLAND, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE
OF LAW.
LESSEE HEREBY CONSENTS AND SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF THE
COURTS OF THE STATE OF RHODE ISLAND AND THE FEDERAL DISTRICT COURT
FOR THE
DISTRICT OF RHODE ISLAND FOR THE PURPOSES OF ANY SUIT, ACTION OR
OTHER
PROCEEDING ARISING OUT OF ITS OBLIGATIONS HEREUNDER, AND EXPRESSLY
WAIVES ANY
OBJECTIONS THAT IT
master equipment lease agreement
10
<PAGE>
MAY HAVE TO THE VENUE OF SUCH COURTS. LESSEE AND LESSOR HEREBY
EXPRESSLY WAIVE
ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT
TO THIS
LEASE.
THIS LEASE REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES CONCERNING
THE LEASE OF THE EQUIPMENT AND CONSTITUTES THE ENTIRE AGREEMENT
BETWEEN THE
PARTIES SUPERSEDING ANY AND ALL CONFLICTING TERMS OR PROVISIONS OF
ANY PRIOR
PROPOSALS, COMMITMENT LETTERS, TERM SHEETS OR OTHER AGREEMENTS OR
UNDERSTANDINGS
BETWEEN THE PARTIES. THIS LEASE MAY NOT BE CONTRADICTED BY EVIDENCE
OF (i) ANY
PRIOR WRITTEN OR ORAL AGREEMENTS OR UNDERSTANDINGS OR (ii), ANY
CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS BETWEEN THE PARTIES
CONCERNING
THE SUBJECT MATTER OF THIS LEASE, AND LESSEE ACKNOWLEDGES AND
CERTIFIES THAT NO
SUCH CONTRADICTORY ORAL OR WRITTEN AGREEMENTS OR UNDERSTANDINGS
EXIST AS OF THE
DATE OF THIS LEASE. THIS LEASE MAY NOT BE AMENDED, NOR MAY ANY
RIGHTS UNDER THE
LEASE BE WAIVED, EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY THE
PARTY CHARGED
WITH SUCH AMENDMENT OR WAIVER.
Executed and delivered by duly authorized representatives of the
parties hereto
as of the date set forth below.
DATED AS OF: SEPTEMBER 25, 2001
FLEET CAPITAL CORPORATION
NEW JERSEY NATURAL GAS COMPANY
By: /s/ Cheryl A. Valcourt
By: /s/ T. C. Hearne
----------------------
----------------------------
Name: CHERYL A. VALCOURT
Name: T.
C. HEARNE
Title: VICE PRESIDENT
Title: S.V.P
Lessee's Taxpayer ID # _____________
master equipment lease agreement
11
<PAGE>
[FLEET CAPITAL CORPORATION LOGO]
LEASE SCHEDULE NO.35352-00002
(True Lease Schedule)
One Financial Plaza
Providence, Rhode Island 02903-2448
LESSEE: NEW JERSEY
NATURAL GAS COMPANY
ADDRESS: 1415 WYCOFF ROAD
WALL, NJ 07719
1. This
Lease Schedule No. 35352-00002 dated as of December 02, 2002 is
entered into pursuant to and incorporates by this reference, all of
the terms
and provisions of that certain Master Equipment Lease Agreement No.
35352 dated
as of September 25, 2001 (the "MASTER LEASE"), for the lease of the
Equipment
described In Schedule A attached hereto. This Lease Schedule shall
constitute a
separate, distinct and independent lease of the Equipment and the
contractual
obligation of Lessee. References to the "THE LEASE" or "THIS LEASE"
shall mean
and refer to this Lease Schedule, together with the Master. Lease
and all
exhibits, addenda, schedules, certificates, riders and other
documents and
instruments executed and delivered in connection with this Lease
Schedule, all
as the same may be amended or modified.from time to time. All
capitalized terms
used herein and not defined herein shall have the meanings set
forth or referred
to in the Master Lease. By its execution and delivery of this Lease
Schedule,
Lessee hereby reaffirms all of the representations, warranties and
covenants
contained in the Master Lease, as of the date hereof, and further
represents and
warrants to Lessor that no Event of Default, and no event or
condition which
with notice or the passage of time or both would constitute an
Event of Default,
has occurred and is continuing as of the date hereof.
2.
ACQUISITION COST. The Acquisition Cost of the Equipment is:
$5,294,141.00.
3. (a)
LEASE TERM. The Lease Term shall commence on the date hereof
and
shall continue for a period of 132 months after the Lease Term
Commencement Date
set forth in the Acceptance Certificate to this Lease Schedule,
plus any renewal
or extended term applicable in accordance with the terms of the
Lease.
(b) RENTAL PAYMENTS. In addition to interim rent that may be
applicable
pursuant to Section 2 of the Master Lease, Lessee shall pay Lessor
132
consecutive Rental Payments in the amounts set forth in the
schedule below, plus
any applicable sales/use taxes, commencing on the Rental Payment
Commencement
Date set forth in the Acceptance Certificate and Monthly thereafter
for the
remaining Lease Term. Each Rental Payment shall be payable on the
same day of
the month as the Rental Payment Date in each succeeding rental
period during the
remaining Lease Term (each, a "RENTAL PAYMENT DATE"):
<TABLE>
<CAPTION>
AMOUNT OF EACH
NUMBER OF RENTAL PAYMENTS
RENTAL PAYMENT
-------------------------
--------------
<S>
<C>
132
$ 50,180.19
</TABLE>
(c) ADVANCE RENTAL PAYMENT. Lessee agrees to pay Lessor the first
01
and last 00 Rental Payments, due and payable on the Acceptance
Date.
true lease schedule
<PAGE>
(d) SECURITY DEPOSIT. Lessee agrees to make a payment in an
amount
equal to 0% of the Acquisition Cost of the Equipment, due and
payable on the
Acceptance Date, to be held by Lessor as a non-interest bearing
deposit to
secure Lessee's performance under the Lease.
4.
EQUIPMENT LOCATION(S). The Equipment will be located at various
locations within the State of New Jersey, or at such other
location(s) as may be
specified in Schedule A-1 hereto. Lessee shall promptly upon
request of Lessor
provide a written report detailing the location of each unit of
Equipment
subject to this Lease.
5. Lessor
will invoice Lessee for all sales, use and/or personal property
taxes as and when due and payable in accordance with applicable
law, unless
Lessee delivers to Lessor a valid exemption certificate with
respect to such
taxes. Delivery of such certificate shall constitute Lessee's
representation and
warranty that no such taxes shall become due and payable with
respect to the
Equipment, and Lessee shall indemnify and hold harmless Lessor from
and against
any and all liability or damages, including late charges and
interest which
Lessor may incur by reason of the assessment of such taxes.
6. The
Rental Payments may change for Equipment accepted after
December
12, 2002.
7. Lessee
represents that the applicable recovery period for the
Equipment, for purposes of Section 168 of the Internal Revenue Code
of 1986, is
as set forth in Schedule A hereto.
8. This
Lease Schedule incorporates and includes the terms and
provisions
of the schedules, riders, amendments or supplements listed below,
each dated as
of the date hereof (unless otherwise provided below):
Schedule A-Equipment Description/Listing
Schedule A-1 - Equipment Locations
Early Purchase Option Rider
Purchase Option Rider
Dated as of: December 02, 2002
FLEET CAPITAL CORPORATION
NEW JERSEY NATURAL GAS COMPANY
By: /s/ Sandra
Buonaiuto
By: /s/ T. C.
Hearne
-------------------------
------------------------
Name: SANDRA BUONAIUTO
Name: T. C. HEARNE
Title: ASSISTANT VICE PRESIDENT
Title: SENIOR VICE PRESIDENT & TREASURER
(c) ADVANCE RENTAL PAYMENT. Lessee agrees to pay Lessor the first
01
and last 00 Rental Payments, due and payable on the Acceptance
Date.
true lease schedule
<PAGE>
[FLEET CAPITAL CORPORATION LOGO]
SCHEDULE A EQUIPMENT
Attached hereto and made part of the following documents: TRUE
LEASE SCHEDULE
NO. 35352-00002, ACCEPTANCE CERTIFCATE, UCC FINANCING STATEMENT
With: NEW JERSEY NATURAL GAS COMPANY
APPLICABLE RECOVERY PERIOD: 5 YEARS
QUANTITY MODEL
DESCRIPTION
SERIAL #
<TABLE>
<CAPTION>
QUANTITY
MODEL
MANUFACTURER
--------
------
-------------
<S>
<C>
<C>
16,570 METERS
5,483
AC250 TC
American
1,700
400 Class TC
Schlumberger
8,772
275 Class TC
Invensys(Rockwell)
165
750 Class TC
Invensys (Rockwell)
94
3.0 M Class
Dresser
49
5.0 M Class
Dresser
27
7.0 M Class
Dresser
18
11 M Class
Dresser
82
15 C Class
Dresser
15
16 M Class
Dresser
165
750 Class
Mulcare Engineering
</TABLE>
WITH ALL STANDARD AND ACCESSORY EQUIPMENT
FLEET CAPITAL CORPORATION
NEW JERSEY NATURAL GAS COMPANY
By: /s/ Sandra Buonaiuto
By: /s/ T. C. Hearne
---------------------------------
--------------------------
Name: SANDRA BUONAIUTO
Name: T. C. Hearne
Title: ASSISTANT VICE PRESIDENT
Title: SVP + TREASURER
<PAGE>
[FLEET CAPITAL CORPORATION LOGO]
SCHEDULE A-1 EQUIPMENT LOCATION
Attached hereto and made part of the following documents: TRUE
LEASE SCHEDULE
NO 35352-00002, ACCEPTANCE CERTIFICATE
With: NEW JERSEY NATURAL GAS COMPANY
LOCATION#
EQUIPMENT IS CURRENTLY LOCATED AT:
Various locations throughout New Jersey
FLEET CAPITAL CORPORATION
NEW JERSEY NATURAL GAS COMPANY
By: /s/ Sandra Buonaiuto
By: /s/ T. C. Hearne
--------------------------
----------------------------
Name: SANDRA BUONAIUTO
Name: T. C. HEARNE
Title: ASSISTANT VICE PRESIDENT
Title: SVP + TREASURER
<PAGE>
[FLEET CAPITAL CORPORATION LOGO]
PURCHASE OPTION RIDER
One Financial Plaza
Providence, Rhode Island 02903-2448
This
Purchase Option Rider (this "RIDER"), is attached to and made a
part
of that certain Lease Schedule No. 35352-00002, dated as of
DECEMBER 02, 2002
(the "LEASE SCHEDULE"), by and between the undersigned parties.
1.Purchase
Option. If no Event of Default (or event or condition which,
with the passage of time or giving of notice, or both, would become
such an
Event of Default) shall have occurred and be continuing, and the
Lease shall not
have been earlier terminated, Lessee shall have the option to
purchase (the
"PURCHASE OPTION") all, but not less than all, of the Equipment at
the
expiration of the Lease Term for an amount, payable in immediately
available
funds on the last day of the Lease Term, equal to: (a) all Rental
Payments, late
charges and other amounts due and owing under the Lease; plus (b)
all taxes,
assessments and other charges due or payable in connection with the
sale of the
Equipment to Lessee; plus (c) the Purchase Option Price
(hereinafter defined).
Provided
that Lessor shall have received all amounts payable hereunder
on
the last day of the Lease Term, and that no Event of Default then
exists and is
continuing under the Lease, Lessor shall convey all of its right,
title and
interest in and to the Equipment to Lessee on the last day of the
Lease Term, on
an "AS-IS," "WHERE-IS" BASIS WITHOUT REPRESENTATION OR WARRANTY,
EXPRESS OR
IMPLIED, and without recourse to Lessor, except that the Equipment
shall be free
and clear of all liens created by Lessor. If Lessee intends to
exercise the
Purchase Option, Lessee shall give irrevocable written notice to
Lessor (the
"OPTION NOTICE") not more than 240 days, nor less than 180 days,
prior to the
expiration of the Lease Term. If Lessee fails to give such written
notice to
Lessor, it shall be conclusively presumed that Lessee has elected
not to
exercise the Purchase Option.
If, for
any reason, Lessee does not exercise the Purchase Option,
Lessee
shall, on the last day of the Lease Term, return all of the
Equipment to Lessor
pursuant to and in the condition required by the terms of the Lease
and pay to
Lessor a return fee equal to 7.0 % of the Acquisition Cost of the
Equipment.
2.Purchase
Option Price. If Lessee has elected to exercise the Purchase
Option, then the "PURCHASE OPTION PRICE" shall be the Fair Market
Value
(hereinafter defined) of the Equipment, provided, however, that the
Purchase
Option Price shall not be less than 13.08% of the Acquisition Cost
of the
Equipment. As soon as practicable following Lessor's receipt of the
Option
Notice, Lessor and Lessee shall agree on the Fair Market Value of
the Equipment
as of the end of the Lease Term. "FAIR MARKET VALUE" of the
Equipment shall be
the amount determined on the basis of, and equal in value to, the
amount which
would be obtained in an arm's-length transaction between an
informed and willing
buyer-user (other than a buyer-user currently in possession or a
used equipment
or scrap dealer) and an informed and willing seller, under no
compulsion to buy
or sell, provided, however, that in such determination (i) costs of
removal from
the location of current use shall not be a deduction from such
value, (ii) it
shall be assumed (whether or not the same be true) that the
Equipment has been
maintained and would have been returned to Lessor in compliance
with the
requirements of the Lease, and (iii) if any item of Equipment has
been attached
to or installed on or in any other property leased or owned by
Lessee, then the
fair market value of such item of Equipment shall be determined on
an installed
basis, in place and in use.
If Lessor
and Lessee fail to agree upon Fair Market Value on or before
one
hundred sixty (160) days prior to the expiration of the Lease Term,
then such
value shall be determined by the Appraisal Procedure (as set forth
in Section 3
below), at Lessee's sole cost and expense.
Purchase Option Rider/Fmv w/Floor W/Ret
<PAGE>
3.
Appraisal Procedure. On the earlier of 160 days prior to the end of
the
Lease Term or the date on which either party hereto shall have
given written
notice to the other requesting determination of the Fair Market
Value of the
Equipment by this Appraisal Procedure (the "APPRAISAL NOTICE"), the
parties
shall consult for the purpose of appointing a qualified American
Society of
Appraisers ("ASA") certified appraiser by mutual agreement. If no
such appraiser
is so appointed within ten (10) business days after the Appraisal
Notice is
given, each party shall appoint a certified ASA appraiser and the
two appraisers
shall attempt to jointly agree on the Fair Market Value of the
Equipment. If the
two appraisers cannot so agree, then the two appraisers so
appointed shall
appoint a third certified ASA appraiser. If the two appraisers have
been unable
to agree on the Fair Market Value and on a third appraiser within
thirty (30)
days after the date of their appointment, Lessor may apply to the
ASA or the
American Arbitration Association to make such appointment, and both
parties
shall be bound by any such appointment. Any appraiser or appraisers
appointed
pursuant to this Appraisal Procedure shall be bound to determine
the Fair Market
Value of the Equipment within thirty (30) days after the
appointment of the
final appraiser to be employed pursuant to this Appraisal
Procedure. If the
parties shall have appointed a single appraiser, his or her
determination of
value shall be final, binding and conclusive on the parties. If the
parties have
appointed two appraisers, then their jointly agreed determination
of value shall
be final, binding and conclusive on the p
